How will blockchain tech affect Transfer Agents? The SEC wants to know


The SEC is inviting comment on its proposal for Rulemaking on Transfer Agents.

A Transfer Agent is a US term to denote a financial institution assigned by a publicly trading company to maintain records of shareholders, account balances and transactions.

The SEC acknowledges that the existing Transfer Agents rules are out-dated: “transfer agents now operate in a market structure that bears little resemblance to the structure in 1977 [when the rules were adopted].

It is obvious that blockchain technology will greatly facilitate or may, from a purely administrative perspective, render redundant the role of the Transfer Agent. The SEC is aware of the disruptive power of blockchain and is asking the following question:

A new technology, the blockchain or distributed ledger system, is being tested in a variety of settings, to determine whether it has utility in the securities industry. What utility, if any, would a distributed public ledger system have for transfer agents, and how would it be used? What regulatory actions, if any, would facilitate that utility? How would transfer agents ensure their use of or interaction with such a system would comply and be consistent with federal securities laws and regulations, including the transfer agent rules? Please explain.